Tiffany is fixing one mistake that's killing business
The company has reported multiple quarters of slipping sales. In its most recent quarter, worldwide sales dipped 7%, and comparable sales dropped 9%. Before that, the fourth quarter was marred by a poor gifting season.
One of its central problems is that it young consumers demand newness, as they have been conditioned to the speed of fast fashion, as Edward Jones analyst Brian Yarborough told Business Insider in May.
"I do think you have a younger consumer that wants a freshness, wants newness, doesn't want the same thing [as] everyone else," he said at the time. "That's why they like a Pandora, [where] they can put a thousand trinkets [on their bracelets]. In Tiffany, you don't have that."
Further, something that relies on old charm and expensive staples is rendered useless to their Instagram-obsessed needs, and doesn't necessarily cater to their desires to express themselves independently.
But all that may be on the brink of changing.
A recent Business of Fashion story by Lauren Sherman highlights how the company is aiming to turn itself around. Part of that is by ostensibly catering to young consumers.
One way to do that is to utilize celebrities in marketing campaigns, Sherman writes. She points to this fall's campaign called "Legendary Style" that includes Lupita Nyong'o, Elle Fanning, Christy Turlington, and Natalie Westing. Notably, this is the first time that the company is using a celebrity in a marketing campaign, she writes.
The company has also tapped former Vogue creative director, Grace Coddington, as a "creative partner," Sherman notes.
CEO Frederic Cumenal has spoken to reinvigorating the company.
"My real mission for our company is to bring justice to the spirit - and to maybe re-energize that spirit" Cumenal said to Business of Fashion. "We are perceived as a very classic brand and we need to regain a little bit of an edge, and do a better job of delivering on these stories… and writing new stories."
That's likely a paradigm for 'bringing in young people.'
Of course, marketing alone can't save a brand that's out of favor with young consumers, especially if the chief problem, according to analysts, is a lack of new products. However, Business of Fashion notes that the company is doing exactly that, by adding new collections and updating what it currently sells.
The problem, though, is that the company is also facing shifting consumer priorities. Sherman highlights how some consumers are delaying marriage, if going down that path at all (something that could hinder the company's reputation as an engagement ring and wedding band retailer).
Additionally, another larger challenge facing the company is that young consumers do not value things; rather, they value experiences. This is a crisis that is not singular to Tiffany; it's prevalent throughout much of the retail industry.
"Millennials prefer experiences over stuff for several key reasons, chief among them is coming of age during the recession, seeing their parents burdened with the "stuff" they had bought but couldn't afford, and the popularization of the idea that life is to be experienced not owned and put in a drawer," Jason Dorsey, Co-Founder and Millennials expert at The Center for Generational Kinetics, recently wrote in an email to Business Insider.
For the full Business of Fashion story, click here.